Nat Rothschild has stepped up his pressure on the Bumi board by demanding pay
cuts for all of its directors.

The financier, who called an EGM in February in an abortive attempt to oust the mining group’s board, wrote last week to the head of Bumi’s remuneration committee Sir Graham Hearne.

The letter, copied to corporate governance lobbyists Pirc and ISS, points out that Bumi “is unfortunately at the bottom of the FTSE-250 and has been one of the worst performers in 2012” under the leadership of chairman Samin Tan, former co-chairman Nalin Rathod and departing finance chief Scott Merillees.

“Given the disastrous performance of the Bumi share price, and the fact that Bumi is now a relatively small FTSE250 company, I would expect you to reassess the level of fees paid to the non-executive directors,” wrote Mr Rothschild, who speaks for around 20pc of the shares.

Pointing out that he has “engaged an independent compensation consultant”, he says the average fees paid to a deputy chairman of a top quartile FTSE250 group are £63,000 a year. By contrast, Bumi’s deputy chairman Sir Julian Horn-Smith “receives £157k per annum, which is 2.5 times this amount!”.

He added average non-exec fees for a leading FTSE-250 are “£40k to £50k” against £70,000 at Bumi before extra fees for membership of such things as audit and pay committees. “This level of compensation is unsustainable,” he said.

Mr Rothschild added he “would not expect to see any cash bonuses paid to executive directors”, given they have overseen “a huge destruction in shareholder value and missed production and financial targets”. He also called for full disclosure of all severance payments and benefits in kind for directors of Bumi and of its two Indonesian assets – Berau Coal and Bumi Resources.

Mr Rothschild stressed that pay levels were “originally set in anticipation of Bumi becoming a FTSE-100 company: therefore all salary levels need to be reassessed in light of the precipitous drop in market capitalisation”.

He added: “Given the allegations of fraud and corruption it is all the more important to show Bumi is committed to accurate and complete disclosure.”

A spokesman for Bumi, which last week delayed its results for a second time, said: “No bonuses were paid to executive directors for 2012 and executive remuneration reflects the reduced capitalisation of Bumi plc.

"Non-executive directors receive a fee of £70k, the level agreed by Nat when he set up the company.

"Bumi plc is in the process of cutting back the size of the board, and has also ended directors’ first class travel and ceased remunerating the use of private aircraft which took place with certain founder shareholders.”